Tribunal denies “dilatory” law firm permission to reopen appeal

VAT: Office reorganisation delayed appeal

A “dilatory” law firm has failed in a bid to reinstate its appeal against a VAT bill 10 months after it was struck out, with a tribunal emphasising that legal certainty is “paramount for the court system”.

Judge Heidi Poon in the First-tier Tribunal said the continual delay by Scottish firm Bilkus & Boyle in making the application was “symptomatic” of the firm’s “overall attitude” in dealing with the appeal – one of “passive disengagement”.

Judge Poon went on: “For procedural reasons, and as explained to Mrs Boyle, the principle of legal certainty demands that parties to a potential litigation know their position at any one point in time.

“It is paramount for the court system, for justice, and for proper closure to a disputed matter, that time limits for bringing an appeal are strictly adhered to by a party wishing to seek justice at the court.

“Procedurally, there can be no justification to consider an application for reinstatement of an appeal that is so significantly out of time.

“The tribunal’s overriding objective is to deal with cases fairly and justly – not only the appellants’, but also the respondents’.”

Judge Poon said she had regard to the “severe prejudice” to HM Revenue & Customs (HMRC) if the appeal against default surcharges of £17,400 were reinstated, including the need to “deploy resources to deal with cases that are quite properly considered as final and conclusive in law”.

Delivering judgment in Bilkus & Boyle v HMRC [2018] UKFTT 0571 (TC), Judge Poon said Margaret Boyle, one of two partners in the former firm, had provided “two-fold” reasons for the delay.

The first was that she suffered from a chronic condition that required regular medication and could be aggravated by stress.

The second was “upheaval” in the law firm when it sold two of its three offices in Glasgow, requiring the remaining office to be refurbished from October 2016, the month the firm’s VAT appeal was struck out, until February 2017.

“I accept Mrs Boyle’s evidence totally, and have admiration for the tenacity and resilience she showed in continuing to manage the legal practice in her seventies, not only with her own health issues, but also through the many financial difficulties of the practice,” Judge Poon said.

“It was her crucial decision in the spring of 2016 to retire from practice which set in motion the chain of events that caused considerable upheaval and stress throughout 2016.”

However, Judge Poon said she did not believe these circumstances gave rise to a “good explanation” for an “undue delay of over 10 months” in making the reinstatement application.

She said there was “a pattern of dilatoriness” in the way the partnership dealt with the appeal.

She said the original appeal, lodged in March 2016, was “itself late by nearly three months”, and the law firm did not comply with directions, resulting in an unless order.

“In face of the unless order issued on 15 September 2016, there was still no response, and that resulted in the strike-out.”

The judge went on: “This is a legal practice whose partners should be well aware of the consequences of breaches with time limits. The professional standards applicable in dealing with clients’ matters, which include compliance with time limits, are not being observed when dealing with its own appeal.”

Judge Poon added that she did not consider the appeal would have a reasonable chance of success even if it was reinstated.

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